Lousy and lovely jobs: the rising polarisation of work in Britain

The man or woman in the street often expresses the view that there are more lousy jobs around than there used to be. Economists think this is confused, arguing that there are more lovely jobs than before.

New research by Maarten Goos and Alan Manning - to be presented at the annual conference of the European Association of Labour Economists on Friday 19 September - indicates some truth in both views. In the last 25 years, there has been very rapid growth in employment in the best-paid jobs but also growth in the worst paid jobs, a process the researchers call the polarisation of work.

The main cause of these trends is technological change that replaces human labour in tasks that can be made routine. But technology has not (as yet) been able to substitute for human labour in the best-paid jobs that require problem-solving skills or in the worst jobs that largely rely on hand-eye co-ordination.

The consequences of the polarisation of work are an increase in wage inequality and a rise in the numbers of educated workers doing lousy jobs.

Goos and Manning use the British Labour Force Survey and New Earnings Survey for the period 1975-2000. They document an increase in the best-paid jobs, mainly in finance and business service industries as well as a rapid growth in the worst paid jobs such as waiters, porters, shelf-fillers and checkout operators among other low-paid service occupations. Together with a decline in the 'middling' clerical and skilled manual jobs in manufacturing, the picture is one of a rising polarisation in the quality of jobs and increasing wage inequality.

The most likely cause of these trends is technology with machines and computers replacing routine jobs mainly in manufacturing (such as machine operatives). The worst paid jobs (such as serving tables) are non-routine jobs and cannot be done effectively by machines - so employment in these occupations tends to rise.

The growing polarisation of jobs cannot be explained by the changing structure of the labour force such as the increased labour force participation of women or the rise of part-time work in low-paid occupations.

Policies to increase take-home pay among the low-paid, such as the minimum wage, and immigration seem likely to be most effective at dealing with the problems caused by the increasing polarisation of the labour market.

Lousy and Lovely Jobs: the rising polarisation of work in Britain by Maarten Goos and Alan Manning will be presented at the annual conference of the European Association of Labour Economists, 18-21 September 2003.

Maarten Goos and Alan Manning are based at the Centre for Economic Performance at the London
School of Economics and Political Science (LSE).

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